The end is nigh for free media - but what does the future hold?

Coronavirus could usher in a new generation of paying punters – but publications will have to get inventive over how they charge for news. 

 

The media industry, along with the many sub-sectors that plug into it, is facing a stark wake up call. 

After years of relying on big numbers to fuel the vast expansion of news on the internet coronavirus has sped up the realisation that CPMs no longer cut it.

The value of a thousand eyeballs has dropped dramatically over the past few months, in many cases by at least a third as ad spend is pulled. 

But even before that there were warning signs that the internet was no longer a big numbers game. Half the world is on Facebook, and the equivalent of half of Britain logs on to the Mail Online every month. 

This has shifted the conversation away from 'how many' to 'what does that mean' as shrewd advertisers search for meaningful metrics, the consequence of which could spell the end for free media. 

Reuters report 

According to the recently released Reuters Institute Digital News Report 2020 publishers are "increasingly recognising that long-term survival is likely to involve stronger and deeper connection with audiences online". 

In the last 12 months more publishers have started charging for content or tightening paywalls, leading to significant increases in the percentage of people paying for online news. 

In Norway close to half (42 per cent) of all media consumers now pay for online news content. In the US, a similar spike has been ushered in by significant moments, such as the election of Donald Trump, with many younger and liberal voters looking to support publications that could hold the President to account. 

UK picture 

The picture in the UK is increasingly going the same way. 

After years of dining out on audience figures - I remember the Daily Mail actually convinced Pimms they needed to advertise their product during Wimbledon and Buzzfeed told Tourism France that this was worth the £20,000 outlay - the fragile nature of the current ad model is starting to crumble. 

Joe.co.uk and Buzzfeed have been the latest casualties of some cut-throat belt tightening, and if the rumours are true they are unlikely to be the last. 

Both publications operated without any form of subscription service and instead propped up heavy overheads with branded content concepts that, while inventive and quite clever, fit firmly into the nice-to-have category for most advertisers.

New models 

So we must look to new models and new ways to get consumers spending as well as brands. 

The Guardian's open donation model - otherwise known as the begging bowl in media circles - has had a lot of success, with revenues increasing to £224.5m in 2018-19, aided by growth from reader income.

As Joshua Benton points out here, it is one of the few publications actually making money at the moment, and its readers have a big part to play in that. 

Pay what you can

As for The London Economic, which I edit, we are considering a subscription model inspired by the Weinerei “family” in Berlin. 

At their bars you eat, you drink and afterwards instead of a bill on the table you “pay what you want”, or at least what you think it is worth. 

We believe "pay what you can" would be better suited to a publication such as ours with a strong social conscience, but I would be grateful if you could let me know your thoughts via one of the below channels: 

jack@thelondoneconomic.com

@jacknpeat on Twitter. 

Thanks